Americans face many challenges and obstacles in saving for retirement. In the past, many Americans relied on employer based pension plans for retirement savings. Today, most Americans rely on other types of retirement savings plans such as 401(k)s or Individual Retirement Accounts, which make individuals responsible for ensuring their own financial security and retirement options. IRI’s 2018 Blueprint for Retirement Security includes common sense, bipartisan policies to help Americans achieve their retirement goals. 

Maintain and Enhance the Current Tax Treatment for Retirement Savings

Congress recognized the vital role tax deferred retirement savings plays in spurring America’s economic growth and prosperity in the “Tax Cuts and Jobs Act enacted in 2017. Congress should: 1) maintain and promote the use of tax deferral for retirement savings, 2) protect and preserve the distinct types of retirement plans, and 3) create tax incentives to encourage greater usage of guaranteed lifetime income products.

Expand Opportunities for Retirement Savings

Congress should enact legislation which 1) generally requires all but the smallest employers to automatically enroll their employees in a 401(k) plan maintained by the employer and eliminate the barriers which discourage employers from offering these plans 2) removes the regulatory and legal obstacles to facilitate small businesses use of multiple employer plans (Open MEPs), 3) increases auto-enrollment and auto-escalation default rates, and 4) improves and enhances access to the start-up retirement credit for small business employer-sponsored retirement plans.

Increase Access to Lifetime Income Products

Congress or the Department of Labor should clarify employer fiduciary responsibility in the annuity selection safe-harbor. Congress should enact legislation which: 1) enables annuity portability, 2) reduces the age requirement for in-service rollovers to purchase lifetime income products, 3) updates required minimum distribution (RMD) rules to reflect longer lifespans, 4) authorizes the Department of Treasury to enhance and reform the rules governing the use of QLAC, and 5) directs the Department of Labor or the another appropriate federal department to revise Qualified Default Investment Alternatives (QDIAs) rules to allow broader use of lifetime income products as default investment options.

Help Savers Make Decisions about their Finances

IRI is calling for federal and state legislators and regulators to work constructively and collaboratively to develop a clear, consistent and workable best interest standard to avoid the creation of potentially duplicative, conflicting, or incompatible rules.  Congress should enact legislation which: 1) requires lifetime income estimates on workers’ benefit statements, and 2) permits electronic disclosure for retirement plans. The Securities and Exchange Commission should adopt a variable annuity summary prospectus and annual update. The President should implement the national insurance licensing clearinghouse.

Provide More Resources to Protect Older Americans from Financial Exploitation

Congress should enact legislation to: 1) enable financial advisors to report suspected financial abuse protect their clients from financial abuse, and 2) increase the amounts appropriated to support currently underfunded federal programs supporting state Adult Protective Service agencies.

For a copy of the full IRI 2018 Retirement Security Blueprint, click here.